In first step of insulin action, insulin binds to its receptor on the surface of the target cell. The insulin receptor is a transmembrane protein which possesses a tyrosine-specific protein kinase. When insulin binds to the extracellular domain of the receptor, this activates the receptor's tyrosine kinase. A growing body of evidence suggests that the activation of the tyrosine kinase is a necessary step in initiating the biological actions of insulin. Accordingly, we have embarked upon a search for intracellular proteins which are substrates for phosphorylation by the receptor-associated tyrosine kinase. We have identified one such substrate in rat liver plasma membranes: a glycoprotein with an apparent molecular weight of 120,000 daltons (pp120). pp120 is present in liver from several species, but has not been identified in other tissues. Using cultured H-35 hepatoma cells, we have demonstrated that insulin induces tyrosine-specific phosphorylation of pp120 in intact cells. In addition, we have demonstrated that pp120 is a substrate for phosphorylation by the solubilized epidermal growth factor receptor. Presently, studies are underway to elucidate the structure and function of pp120, as well as the physiologic significance of its phosphorylation. In addition the ontogenesis of pp120 is being studied in the rat liver.